New Appeal: Can the High Court award costs against bankrupts outside of their bankruptcy estates?

In this determination (O’Donnell & Anor v Lehane), the Supreme Court granted the O’Donnells leave to appeal on the question whether:

The High Court and Court of Appeal erred in law and in fact in holding that they could award costs against the appellants outside their bankruptcy estates.

Background

In September 2013, the High Court, Charleton J, granted Bank of Ireland’s petition for an adjudication of bankruptcy against Brian and Mary Patricia O’Donnell on foot of a court judgment for €71 million. The O’Donnells issued High Court proceedings seeking to have that adjudication overturned. In April 2015, Costello J dismissed that application and granted Bank of Ireland an order for costs for that action against the O’Donnells outside of their estate in bankruptcy. In December 2015 (approved May 2016), the Court of Appeal dismissed the O’Donnells’ appeal against Costello’s High Court decision and the order for costs.

The O’Donnells made an application for leave to appeal to the Supreme Court on four issues. The Court refused leave on three of those issues. However, on the issue of costs, the O’Donnells argued that the High Court and Court of Appeal had no statutory grounds or common law authority on which to award costs against them outside of their bankruptcy estate. The Court determined that the O’Donnells had raised an issue of general importance and granted leave to appeal on the issue of costs.

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